ICE - Earnings call transcript Q3 2019 | Intercontinental Exchange, Inc.

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Operator

Good morning, and welcome to the Intercontinental Exchange Third Quarter 2019 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Warren Gardiner, Vice President of Investor Relations. Please go ahead.

Warren Gardiner

morning. Good XXXX section presentation of quarter in be release Investors the the earnings third can and found ICE's ice.com. These our items call and will be will available for be archived replay. forward-looking may statements. call contain Today's to These we and subject risks, statements, to our and undertake obligation are uncertainties. which assumptions current update, no judgment represent

explanatory materials we net meaningful reconciliation the our in for to In our net performance. on of definition and of explanation transaction-based effective operating with Form our non-GAAP adjusted in earnings earnings measures cash a please the rate, call, these refers used adjusted and more as forward-looking to debt second our To For income, cause XX-Q. measures, our be an earnings refers refer of the equivalent business information XX-K materially to in and measures When non-GAAP differ to including risks why income, on the adjusted to GAAP the as find management the description uses XXXX EPS, and of operating earnings flow statements, filings other this additional this supplement details a revenue of and revenue terms. of believe margin, how per regarding Please from the expenses, certain see adjusted earnings operations reflective SEC. tax could diluted our refer to are page share. We we that results those EBITDA. supplement, to described cash to expenses, free well certain notes term deem the core

CEO; I'll Financial and today the over now call Ben on Jackson, Scott. and us the Jeff Chief President. are Officer; to Sprecher, turn call our Hill, With Scott Chairman

Scott Hill

third Slide morning, Good you results. joining begin everyone, from of I'll key highlights today. on with Warren. some the and our quarter for X record Thanks, us thank

XX%, points margins currency per Adjusted last and Third of a history. an was energy in clearing to currency revenues earnings were growth resulting by XX%. generated in our XX% included revenues adjusted and over operating constant XX% guidance. our the a of otherwise share SG&A. Record $X.XX, basis. third in record quarter of billion. $XXX X quarter adjusted versus million constant Adjusted expenses of XX% our within in would growth onetime roughly grew million, XX% listings and increase record driven data up performance growth middle including of expanded $X.X Expenses in trading Strong a in income, record the grew and right best operating X% to company's data which revenues been operating totaled a strong million, which $X quarter on year's $XXX benefit financials. revenues last year This have

the adjusted operating billion. of year expense to we expect a fourth $XXX the $X.XX to to to guidance be our Looking full million. $XXX million quarter, range range XXXX in $X.XX expenses billion of This to improves

Simplifile, need and three second the Importantly, that our around items in XXXX, that though, of year as to the we've quarters. to through the $XX reflect you'll add full licensing forma the think you pro about first million onetime mentioned quarter impact a to reclass started

the contribute and our in around adjusted this are quarter. XX.X% filed FDII, the assumptions, provide to month and rate These income, fourth the XX.X% aspect published of rate quarter refine year low color year-to-date XXXX to tax our our foreign want just in which assumptions XXXX expected the upon for adjusted intangible some guidance Reform, of were Tax XXXX. able to on March or to and additional we and derived U.S. I prior in provision. XQ, Federal true-ups tax are the XXXX return an reflected also positive third of Based the to we implications refined related rate in

More importantly, XX.X% lower range range of to XXXX tax U.K. next we by in tax April scheduled to expect XX.X%. combined year, a a points our of to reduction with roughly changes, these XXX basis

return, We've quarter. to of and XXXX, flow that of capital months shareholders free through through to XX% first buybacks generated the over over $X.X during of returned we've $XXX including cash our cash the nine Moving repurchases, share of dividends billion. third million

grow We or continue incremental to M&A. expect the need we against for grow, investments capital as return to balanced

increase of up XX% Adjusted business, income. expanded Revenues to to margins the discuss helping revenues Energy XX% across crude our operating Trading the in adjusted third XX% In growth Energy XX% Turning growth our oil to a for and in Clearing I'll and by other ever Slide led were increased complex. quarter best quarter complex Brent operating year-over-year ADV and third marking our XX%, drive X. our increased by $XXX quarter. our in segment. million points year-over-year, X year-over-year, oil in XX% XX% refined revenues.

continues ADV, business gas growth, quarter volumes, also including XX% year-to-date natural XX%. third record up nearly and have grown which deliver strong European to Our

Brexit, rates, year. the year-over-year. XX%, compared of as volatility with to the increased adoption and product XX% XX% in end Higher our since Euribor interest drove our North FX. combined led addition, Volatility in Futures well of growth up market ADV global increased and basis index business futures. American of interest Similarly, Brent Sterling last business our for equity natural Energy crude, open adjusted uncertainty In respectively. Financial MSCI by OI our in gas as volumes October XX% related recent TTF prior year, the across last and revenues XX% is versus In across strong to business, X% deliver to records year direction increased in levels ADV of ADV around and our

in interest, the record we from closed last sterling end our open the levels of financial XX% registering October, interest XX% business year, is out is As from of of up open futures which with XXXX. October up end

reflected was buy side revenue of clearing our record including which million and fixed credit, $XX CDS and million of $XXX activity. the from income business, for In levels year-over-year clearing X% revenues totaled quarter, up

X, to segment. Data I'll our Moving Slide and discuss Listings

XX Third business, XX listings the raise record customers our operating year-to-date, XX%. adjusted NYSE billion In the totaled IPOs listed helping $XXX a over our quarter quarter million, in IPOs has listed margins $XX third revenues during and to proceeds. with increasing

continues art today's attract direct in In listing innovative model NYSE's with human interest. The process. our the our uniquely direct makers, to that offering the market of frictions hybrid addition, combines reduce state the of exist technology, IPO to judgment

to million, by our solid data $XXX Shifting currency increase services. and across growth reference a pricing quarter, suite totaled currency on pricing basis sequentially of as in data on a results as basis. driven index well in to Revenues constant constant improved business third year-over-year X% X% the analytics of and our Revenue an products.

growth sequentially passive again the expect and towards revenue the active product fourth benefit workflow our and growth X%. grew to NYSE and We from secular from by as Slower interest growth feeds, analytics strong data commercial and fixed automation mitigated continues. and exchange revenues X% global futures commodities In platform. in shift in continues our at to improve in quarter income was which pricing to market business,

quarter constant revenues a Global basis, revenue, performance on a Ice of In strong implementation. improvement driven sequential a XX% with grew Network in desktops by reflecting and connectivity, currency

on secure and demand We for expect the optimization, will of continue supported cyber but to vendor implementations. be by connectivity timing connectivity growth vary results continue quarter-to-quarter to customer based to

year. services $XXX range provided data to expect and to right year, fourth the full $XXX million around revenue the the revenues thus, we quarter be of the we our will entered Finally, the when middle we in data of million, be for guidance

model in serving customers on per have your even I'll adjusted and months record record growth I'll we during clearing business, continued strategically have $X.X But remains our diverse questions take be in earnings data a business to to returned Through And focus Our first open efficacy over we our future, XXXX, The Jeff. delivering record adjusted reflected and and for in to business. revenues, it our once complemented record the continued across invest interest trading to growth to is income shareholders. again Q&A. of turn shareholders. also share. operating we happy by our generated billion our now, nine of our value compounding as and

Jeffrey Sprecher

an of and begin companies on one Since operational infrastructure number pursued expertise. leverage evolution has inception, today markets as I'll into It's in morning the our customer us we needs. and serving across technology industry guided everyone of major approach adjacent that an and markets a Scott, leading array diverse one most Slide Thank that and our call. to positioned and X. you, good while of geographies opportunities market operating our growth asset classes the on participant that's world, the

these that solutions with importance Our These payments foundation, drive helping infrastructure experience we that informs areas ago, pretrade settlement proceeds and our that well valuation in a to not of workflow us transparency. automation, market continue in made We the enhancing and our headcounts. improving building indices, services. facilitate are clearing decade over trading, first of efficiencies, customers' on to decision-making analytics, investments build decline and and

and X%, customer also comprehensive the and quarter that the data years coupled complex, XX% increasingly but with become in that needs commercial nearly marking customers consecutive performance the quarter in the as grew seeking only is our ago, XXth of recurring evolving particularly greater third for clearing value analytics. evolve investing half investments. serves such that products truly year-over-year, precision, of base. revenues, of not energy global. better saw liquidity in importance One and benchmarks dynamics the demonstrated an while global of Today, Our major of in data growth. provide number and trade grew when Trading A an are growing platform our year-over-year revenues represents business, revenues we which

refining Brent Our global natural over greater spreads, the of such oil. markets platforms spreads oil around our increasingly our products are products, global for product world, importance And our are crude and risk including the benchmark locational turning as off contracts, complex as built XXX that customers gas management their needs. to oil and spans gas spreads, gained

MSCI in across XXXX. have we our average XX% equity drive of up the JKM complex futures daily In the first interest third contracts, helping our through at end existing derivative our MSCI having MSCI, we that gas has expansion platform third of our our volume together quarter. the reached financial strong markets, our through gas revenues the announced arrangement natural rate contracts with to and average months September, grown record the extension XXXX, following quarter, In And In complex TTF strong enjoyed. XX%. Asian of the European we and year, an late nine another the another of record moving is annual performance with of the open licensing since partnership over ICE to in in on

services. And this and part plans a reference new pricing MSCI's ESG innovative integrate into based expansion, contracts MSCI's growing ESG to a data of launch ICE's ICE futures to to new to As on market. access of MSCI suite of indices bring data and its suite leading and franchise plans

a few with So grow to these technology customers' examples markets. of the and are key apply that our listen how closely expertise just and industry participants ecosystems work surround to we operating our needs, our

Over continue well to evolve we've establish that exciting number a help the strategic for future. launched few a and of stage grow the initiatives to will past foundation into months, early us

and of will will example, of successfully powered complex Data MOVE ICE trillion $X with from a in funds. U.S. indices we another yet billion indices The by virtuous Bank assets, AUM join moved Merrill products, which the and of is launch by the towards move us options The Lynch. and analytics. managed America MOVE and with For related platform ICE including collaboration also Data end to index trading of of exchange-traded industry, This Services an allow example the Indices will October, acquisition indices be futures benchmarked the data drive of how cycle. $XXX

Hub. through ETF October, we first executed trade also In our the ICE

an key data, Leveraging it's portal days, central places with also data, comprehensive it digital participant is on a analog as analytics, the Services reference offerings process, activity ETF of to ICE intelligent platform index interest the ETF while Data also across is makers the trading, this that market Hub leading a pricing authorized which the the and middle early participants a create-redeem platform. will conversion. income number of offering as market building, primary for undergoing act While and and known is in BlackRock fixed joining our

and continued sponsor, BlackRock's its towards leading is and this in more important growth. an world's efficiency first ETF the the project developmental industry step As to partnership bringing standardization supporting

customers the bonds integration will In trading soon our addition with ETF various platform. our trading launching Charles protocols. to within our recent to the access connect Hub, Together protocols to with will platform, ICE venues have River institutional ICE's Aladdin soon and trading better

September, investors utilization the servicers, of adoption of in eNotes September, of At end decision that and services, through digital, created, bitcoin demanding and continues. first-ever custodians are And comprehensive have XXXX. industry's almost This which year, the all launched XX,XXX eNote mortgage been settled go solutions Xx they're workflow. future. of its to U.S. our e-registry is physically ICE the across efficient, Bakkt making and more Lenders, mortgage nearly successfully

our after, And to of bitcoins successfully of bringing trusted facilitate broad transfer this the hopes assets. trusted cybersecurity to ever infrastructure matter are class. user and And regulated no operations, secure to digital an digital completed regulation, we first that the Bakkt experience, vital regulated environment. important provide can what physical delivery establish assets. the asset and towards pursuant and with These adoption end-to-end consumers, soon and secure In confidence to infrastructure state-of-the-art is and steps ecosystem investors

remarks my conclude Slide on I'll X.

of The in amount was of EPS operating third platform. another growth, revenues delivered a to all income. record future returning continue across strong digits, shareholders. example capital while we and quarter We record grew to our and invest record our execution double

to our work technology closely value XXXX, the quarter to our and a all As ahead. apply key excited markets to create to continue industry improve about and we're grow, expertise our and to beyond will we participants for we customers operational and and with lie to and platform, stakeholders. of look that the positioned growth the evolve forward scalable fourth We've uniquely opportunities built

X:XX colleagues contributed to like thank question-and-answer to that for third call our that, moderator, I'll ICE thank I'd their Time. the their with in efforts company's quarter And turn conduct in very my to the until history. quarter business Andrew, customers at the the and for So session to our back best Eastern our

Operator

Instructions]. [Operator

from question first Repetto comes O'Neill. Sandler Richard The of

Richard Repetto

but growing analytics and question when sort is and that data the say the guidance on that I of varying changed? but -- I update And differences? connectivity, growth guess you us why of line-by-line, gave segment. why it from gave should that's you X% guess, desktops, you guess, far some any the the the difference, I Network could helped ASV desktop is you should pricing Scott, I at can et as first is clip, what The we really data does the the you So -- as has listing initially. still on earlier guess. Global exchange cetera, say we make I would and

Scott Hill

of it's fee, prices, but the question, it data bond couple Rich. prices, when, think think I made would prices. it's a I connectivity It's have are Jeff similar -- a the four historic a a sold And ago good feeds each retention we've couple it's it's it's bought it could launched one not instructive. by year, and that's business prices. that is bond ago, we calls What years comment forget effectively what product it's way and prices, sold raise the of just which a with it Jeff built -- that percent, I where would prices solutions, hope that as data, give real-time reference superstore, now, you our vault, data referred will customers. we've to it's And

increase beyond go do X% and And just be. what so will beyond X% we're customers is to with able just to sell and bond year's this to prices more, more what price

and the we're And more be so should what a necessarily I focus because single that's do the at collective, think on shouldn't really look line selling.

even been X%, has it's have and exchange which each been and out, P&A. which need and our X%, a X%. analytics that reference to in data. has selling exchange the data been in is pretty That's has been connectivity, pricing in we're our And has lines. X%, business is data, because in those selling balance, and offerings data in desktops products just connectivity it customers which of we feeds, and year-to-date, growth kind connectivity, pricing is We're selling of the and We're good

did, us also the dynamics actually going I in I pricing again, performance that that but fairly in similar. selling a so closer buy, and and year expect earlier And didn't the But to what X%? did want to customers to next analytics be the connectivity. have I think expect quite year little see are we're the to be to we going I are

X% a As looking of data Exchange little we're I growth next said, business again and as into I growth XXXX. I again, analytics X% generate think a think to pricing into a think quarter. top year to that grow is on X% look wildcard. bit the Connectivity, is accelerate at another X%, or it. fourth of going I positioned it's And we could

If a related drag, we quarter got you particularly the guidance, to NYSE. about think a our fourth bit of

solid So setting from business again, on years is what in there's X% that grow think each of given we've ago, last to positioned X% be X% that grew wildcard that a those data X% this and to range X% focused And year, XXXX. I going to aside, going grew businesses. contribution model X the year a again deliver we're is to

Richard Repetto

Or And Got Ben. on it's secondary given what it's and just it. that how just equity, the redeem you the ETF the you does fixed But the far, feel income. learned know few understand have can not question and to tell? got create Scott. redeem to That's so the focused in helps. the, redeem and but early weeks that from it it certainly just transferred about the and -- trading too But transfer just when seen my be, got and income? now, I trading, that make guess, I I launched. be that But believe, my you've over you Hub, we guess what only it primary probably ETFs creation too. it get try maybe got to Jeff, in fixed secondary in can right is helpful, BlackRock, And to we've what I would follow-up we that up, I on create is, --

Benjamin Jackson

And that couple up had Great we've very Ben over on Thanks, that about launch Rich. excited highlighted. days us twofold. partners network. right out both for It's and getting focus ETF we're ground Jackson. past now our And the you about is off the controlled of of question. the the Hub building as is really customers opportunity And the the with and the our

So areas. -- and touched you both on

the this is negotiate about you acceptable not first underserved in multiple completely fixed security. is market. market, single that a think today. basket provider banks really multiple the to So of independent primary providing and And services whereby what primary one a connect when marketplace, equities income, to is issuers can market both There that's of is

of equity So for that what an share need that acquiring to basket a go single an is income, name our equity it's marketplace securities for share of swapped income a can fixed fixed a and bonds of ETF. basket basket that in to ETF, equities order that an swap for that, And of of ETF. single in equity acceptable a procure with issuer, out I in when single issuer, be

is this us, either -- For issuer issue are provided each which has their own. very is issuer bespoke, we're replacing what systems,

then issuers consummate can again, the the spreadsheets, swap of and multiple a trend, then share basket multiple for it's negotiation this of process that in A introducing manual for settle can first different Some the marketplace, to of single ETF the issuers time and perform And securities marketplace have whole banks for lot the and is we're very transaction. ETF what classes. disconnected. phone, done and it's that whereby, is the this asset over

XXX% is embraced has the greenfield industry opportunity, this So and this.

and multiple as advisory this, of banks issuers committee and part that's of the a part an that as big that well all consists are have that. been makers APs We market big of

XXXX, we're this of big XXXX, launch out around we're about be weeks primary a were that the week, that about through is network banks coming in feel APs going functionality past and the good that Our fixed balance into that classes BlackRock with asset to mentioned, to the as build really in going you've controlled for launching We to the establish to trading network equities, income. and building in soon mentioned environment. the press several and of it's in release be network that multiple starting continuing in out and

on you second touched secondary The thing is trading.

of And equity. So of so is actual procurement the this hub. secondary trading, downstream this is the

So procuring fixed you of York and web, basket, go of venue and the to the those to when trading and platforms usual marketplace the that in have historically Bloomberg, institutional income procurement that space all [indiscernible] bonds primary suspects income individual equities a to market In know you you in fixed the can of like downstream think a fixed once into into that the New our then like go Exchange. to lot in Stock bonds trade are ETF. those entities share into go access the that of a would been swap go for assembled, income,

the be to are the integration completed customers, first provide all coming with build to or and in central be platform, establish for RFQ in time, platform. book choice a portfolio venues haven't platform is our integration we in network. this -- order really another of River, out the downstream ETF our weeks going with around us helping and auction and commentary Aladdin our played in completed again, will redemption this this helps through our space with efforts process, For either that our And our Charles his Jeff our creation to prior, integration mentioned

So it. we about feel great

Operator

next Bank America. The of Carrier Michael ahead. question from comes go of Please

Michael Carrier

maybe one, expenses. on first just Scott,

this better. a bit So quarter, little

You fourth pretty even quarter mentioned and good. the benefit, looks the onetime

the healthy, revenue about just pretty business? what initiatives you view of that's place, terms expense an anything have thinking impacting the where some be your we're on then like growth, should the Just of to the get side? base wanted in the on in we And environment margin in synergy expense that incremental seeing in

Scott Hill

sure get budget. as XXXX our be all ready the your thinking to Board starting good a the time of and that question, It's you we pay to I'm model. attention year XXXX Mike. about to it's to Thanks, take right

base, key So my the in I I think at of think, you where middle landing within landing is, look, about even guidance, said look if and XXXX think original we're now, the we're expense though remarks, million our accounting the thing prepared and I move right in we've the mitigated the and actually about That net some gross million That's around the of $XX been middle we're share Simplifile change from of added that still notwithstanding, to right items. to our of sitting revenues by revenue in $XX about onetime agreement. original guidance. it

So acquisitions. the able then million expense on on been of performance $XX delivered We synergies, another last more of additionally to $XX the of has mitigate our been good. the million recent we've but expense million to $XX

And to has it as a ours. our expense years, then I just been in think competency core normal demonstrated over addition management, which that, the of

couple we've going you in as of to the where past to the reward year lot I done revenue. years, to be last with it consistent some about like growth so will a has we're the to have expense in is next employees start couple think our going what a look And think that support of salary year, increase, with We're years. model next going for of

that. saw You some of

the and at top quarter, that tech growth the reflective look share, the line which in example, revenue shows in that's up line. line, the of for some of you If good third on

way very you the to. look it's at then think if going think you alluded couple modeled the XXXX, back as similar. to So think guided into as And very last year our we've been I good, look going I years, performance of about overall expense you this and has

launched. year there'll our be we we've rate. Specific the expect is to news I think ETF in we're part again, is in run now year. I rate Bakkt, But a got. as acceleration that investment the some that next investment's the investments, run largely into Hub of That in through. good move

to year. And that's us actually And about rate doing so we thought in the lot you we've run better shown expense an that than talk rates would are initiatives we entering us again, be a that the run expense led this of that's hear what you.

Michael Carrier

as Okay. That's out There the helpful. a just around, And some that follow-up. again. skin clients a the paper game in of CCPs and then white was use quick

Just any regulators, thoughts, why more curious changed anything if coming new changing is on conversations is or that with front? again in on anything's up this your is

Scott Hill

Yes.

clearing for thanks a and my the for take So my head question, on moment. and head off I'll put CFO

So couple things. I think of a

of are all, the they're things think a been new of relatively that but These of hearing places, lot important in in lot not small of for two, Number a partners paper. small important a Big I our first names fraction number that customers, and we've a years. markets. it's five in actually people signatories. participate

So timing Jeff the that and been particularly don't fund the substance saying manage our We bring But Because the thing that clearinghouses In sticking. a the think create it think timing, I game, from, for I things back of want which skin aren't important clearinghouse. to surprising five was that right? there not the years you've an it, of take terms the industry put flew so about conference and risk. risk is just long we'll remember, talk because into gives is you XX% they venue we to in guarantee fund of a they risk, as is don't dig us effectively position. the to

a the an a that committee we validates, approves short. up offsetting and of take then IM. By member made approves, IM regulator third-party that board collateralize that approves. a way, We that that's take and independent a risk on based clearing long, with an We models

next in the will well. time job first probably of time me risk be a I So model the as and the the one our last that in no time oversight implement clearing with houses for

and So look bit request over some in true be here little in I of firms to is that are risk a do think mitigate interested to a some and again, important requirements customers, a on of try those if what's capital very dialogue the I you there's a the partners managed. paper, and there that a needs versus view that think look because, at but those we're

in engaged dialogue. the we're again, so And

beyond move it We some the are expect I the in proactively the issues But taking don't steps raised. really dialogue, of needle. to address to being

particularly As the last I it's not moved years. in said, new, it needle hasn't and the

Operator

question The Worthington JPMorgan. of Ken from comes next

Kenneth Worthington

wondering can you share penetration trading shares the market BondPoint about prior how those of initiatives you of those implementation share acquisitions the is about in I markets in talk but If ETF and getting big by some and I'm know Maybe of TMC? first, sort what of what has the of to done your just since have looking or about strategy And as your market early of of muni the Hub sort instruments credit on, turned increased, underway. of much? it's your how done markets penetration

Benjamin Jackson

Ben. Thanks for the it's Ken, question.

really the munis is, seen front, it year. space. the the volumes the municipal good a they believe backwards the MSRB The have in area you looking, very outperforming I in space. we're them a volumes, treasuries news so market strong. when just look mentioned retroactively, tough I But they've is them On things prior space concentrated MSRB. tough, seen the our good very at news municipal been platforms, while look that been And call, on on, at have if was is this the we look tough we you again, actually has have very, been And that at that been were all-comers one The volumes, tough. platform of that it's municipal for the historically grow

treasuries favor, of come out favor. falling munis have with into As

that on our getting little owned been has the platforms, integrating which past the a and we've Now year focus in both completed. businesses together, we've operating businesses year, the a over

be self-clearing us actually of ICE develop lower of the that third the which over past taking cost And create they're place businesses. early underneath will able a of on in we've bonds of dealers, We've those to to that will platform is project again, called So a businesses. clearing be efficient now running broker year the more and single the the next thing the a more bonds providing in year, to been to these business us. businesses, operation efficiency executed the for consolidating doing part help

the for expertise our sell-side represents to we've trades. these executing been platform, out you auction of give of heavily things both type is buy-side institutional all volumes. getting on businesses that's for number controlled years, for see point area the to we involved the to that in had in do And And the and prepared a repurpose that in complete, opportunity done, where auction River couple of RFQ we see launch development a and integration solution portfolio off manner, weeks. focused sense to that, a the some work, an the as and the we've of really with our the articles, remarks, we capabilities, of integrating out we've these you space executed, on press that real in We've in next been be as Jeff Aladdin and Charles you we've to commodities then which, mentioned that's to big to on the our building built parallel leveraging In And efficient underpinning a OMS which ground. had them with RFQ marketplace. more portfolio that his also read the completed portfolio can execute platforms to initiatives CRD XX% complete if any side, that have auction on have, in

our managers, asset to asset with partnering been of We've managers benchmarked indices. one oftentimes are as

of can index. ours, the as well one those to data, indexes or a bought be as So America index we pricing third-party and indices benchmarked third-party underpinning to Lynch, of often they asset managers. When reference our the than is more from or Bank a benchmarked that not, those Merrill

of trade of that to have utilize asset done The saw that single trade. a the to And using have the combine ability an auction for for to portfolio our As give the went manager, portfolio asset a notional either in they've and off us portfolio the to size as a single or and that that, for quarter data decades then quarters in their also been prices those a three to give able the of we of powerful portfolio pretty in be basket managers are for asset example, a one single trade strike -- them price that around to north well we third decades. auction rebalance in you against on $XXX all our the trade, million they're looking of to world to auctions, the their an it's manager combination. NAVs at prices, a spread in space, the ability where entire

and leveraging data strength on on focus is looking in is we another our in pricing, with of have expanding growth. our historically something execution to engage building we're out we're analytics is institutional execution, our for and into going that with, capabilities area we what side, which space reference this So a we've But we've see some had the been not success look space again, the businesses. further to network, our that the customers our and to really

Jeffrey Sprecher

this bond If nexus we said I is securities. could have underline just didn't into execution a Ken, is, of what Jeff. natural Ben the

are there so And space, as aware. in good companies some are very you're -- that and that

venue. out late, as were we we But were building and late. will, So we recognized if an admitted you execution mentioned, to that Ben

hard pivoted the execution all we from we that good flow build things know so And out to venue. tend to of a having other

strong And data of buying And the know back trillion against so a have indices benchmarked and Bank the now. our surround data major predominant MOVE which fixed now leapfrogged that out built ancillary the provider buying of venue. the income $X one volatility We, is have of from ETFs we to the a indices, and otherwise are index, the X,XXX America, in platform would the where benefits that execution been with the largely indices we income way, come fixed we space. end having

is root space, Ben move off about, essentially the of Hub, execution. end execution which the working at what that really into he's to including, levering created is of as most on strong the is so forward is talked extensively And ETF demand back where for

Operator

from of Fannon comes Jefferies. question next Dan The

Daniel Fannon

about reasonable to you're looking a how other terms and active think past we as about months buybacks, on kind different than today XXXX? that in of And the about and return been next talk you has as talk kind what of this And base potential XX capital periods? of of M&A, focused kind about heavily case is just wanted of year. for M&A terms landscape can you it's think Just you at if obviously, in are

Scott Hill

question. good a it's Yes,

I on with a the add return. about linking Simplifile question your the do seen going M&A, are some we've in year interesting mortgage behind that the building business hasn't where last terms run grow was over return, we able businesses, look good of what adjacent simple described been and years MERS. and Obviously, in and news about those full approach made to think think kind there's is that revenue to it's and recently, plan you've landscape. a changed just are for on short been game $XXX how and strategy. think and the But our of is That's our ago, spaces answer how acquisitions is a we just deals bond is, we rate you at couple there. smaller over we some opportunity A capital the is, it. buying And that market logic there things approach serve. years the Jeff of capital More million of it our we've couple us business if already can

a to going than to which year, before up that. XX% year did was be over end we returning billion the more which last year, is bigger going we're than around So year, this record $X which was

is buybacks, since We've my years, the strength double and we've dividend we've to digits capital able also to prepared over I remarks, said as effectively, do to able consistently with we've effectively. grow, we've both as and consistently said been return in it. do returns returned year as cash we strategy but the it implemented And the grown our share deals to capital. in And every need sheet, the of return been our of grow deals. XXX% we We've don't our balance through

extent that to We from are us that of shareholders for we look types an appropriate can deals help so that on To at continue grow it. to fit the And marketplaces find generate our as monitor the that find return us the we'll returns we've earnings make have. the capital proven us that strategic we help extent them expect effectively And good execute environment. the can don't we're at we that those, we'll right we better. moment, the opportunity because go

Jeffrey Sprecher

were that was just and the of likes business, equity at a firms mention the where a advisers our that people in seem had and that hands, to some the And same get different different same market core essentially, a the a there'll M&A a company low And like the better transactions the I'll that can of that done private move and market, market, industry, deals that multiple a you company and company multiple, that high public multiple be team company, a multiple to has management expansion. expansion. are

Those that that one of return we we a the with, are expansion lot good a reward deals of presented presenting helped good here, being people are we're have so and And capital metrics deals people invested multiple are other simply you being use, deals. that multiple have -- of that team us many a interesting, because we management on have but them.

of management of it really long in company run just its kind would at network to teams I'm for because strong feel other gain, sure teams tend management we be that and because some than could us to this help really would sales and/or management team leave sure efficacy. I'm do a thing expansion isn't ability of the just as multiple that things management provides in And future like, not a acceleration would look onetime or not team, we have be distribution, Our deals. doing the kinds rewarded. run the of long those pure we something unique different justify pure that But that

Operator

Instructions]. next The from of question [Operator Kramm comes UBS. Alex

Alexander Kramm

things, Just ETF a Hub, a of couple follow-up actually. on

that is market other makers think talking absent adding, hand, you've think thing you're one the and I been issuers. that's been I but the authorized On one participants about the

early, know be Because I on just it's but Hub, think some and I ETF on the also really were you think think industry are some drive for in an I quick fees. I but that? may advisory solution connectivity there standardization. where council, idea And the then a there one Scott is to So

it'll And to? be that's going so maybe in going whether near-term up? about to mean, be data talk can revenues, you this revenue is to And accreting impact? show like the just I particular,

Benjamin Jackson

Ben. it's Alex,

you acknowledged it right he latter Jeff can mentioned hit commentary, network. And now and on I point and that commented the We Jeff's his industry development to Scott. in multiple the and and acknowledged that all up; their services single together issuers, well access commented building portal across focus partner. But key multiple in single prepared brought really out very comments, early is on in that can the a banks provider I efficiently a BlackRock focus On across in, as it really is single to industry, point that stitch this this APs execute a single as where marketplace, is of and is because there very no pain through independent marketplace through transactions. a a the issuers for

are, what partner in points So another it's with as the and efficiency some the we we provide we real to closely the marketplace. some see other any this we to, marketplace marketplace, help, as understand seen one when provide that innovation a can that pain industry that

Alex, mentioned, issuers. have you we do other And as

and of you take expand of in on on early issuers the major in everything started, adopter into as was this but weeds pounding weeks it. the Fixed through only income. how marketplace, coming the through early other the detail can pushed think advisory to us, committee. this And fixed this but are works, on, constant demos the that with area those feedback issuers equities are and us BlackRock we we working and going the is not The requirements, replacing board. in a through giving change all other income But where change. in they've we and feedback on other that to out the and the released, of the optimistic real time manual that come the issuers whole all processes been And time, business requires this is spending very of all we're that get the and it's most will marketplace that providing we're and types going inefficiency. really out that been real as a us marketplace of sea has as build helping analog they've a for the this functionality and bunch

that for great now. take it's and we time but to going we're about to to the play out feel XXXX right XXXX network So position in in build, and

Alexander Kramm

on you Scott, revenues? show they do have Will And the anything up?

Scott Hill

I Ben's think reflected answer. was that in

is XXXX, building this beyond year the the to is about of financial think felt network. and be more out going impact I next really

So I think stand where with things that's XXXX. regards to

Alexander Kramm

enough. Fair

growth. little the Just data helps every bit

wanted just to I double So check.

Scott Hill

indeed. does, It

Operator

of next comes Brian Bedell from The question Deutsche Bank.

Brian Bedell

that headwind? I could quarter of to documentation, have on be revenue data in how on on confirm, desktops. drag mortgage detailed that thinking of on can drove million Obviously, outlook on around just a about wanted on as comment Maybe wildcard. NYSE Just that if think And maybe And the pricing that to is and back X% analytics comment? $XXX so you $XX could drag thanks, to Scott, exchange fluctuate the in or Am is we what the data forward, your $XX million that down revenue growth for think And revenue. million Just or the the that that much X% obviously, the sequentially just rate. based a going side the quarter? is pool that's this I that. right

Scott Hill

Yes.

an that of you notes kind roll and to didn't in I'll balanced a out. number, given quarter we're with is futures, are And couple to you looking continue So the really growth, pricing lead X% data. I guidance that remarks, third and just do revenue in exchange can the you and couple points going quarter, a analytics. be I've I said, of X% a they're data the already accelerate into at of -- to only give of the I of kind growth if kind growth in seen the going on connectivity data NYSE where I that forward will said said my math fourth the solid. the but the and prepared say exchange

up story to the we're at it's NYSE. given so the And is seeing X% again, probably a going average, is which close to of X%. it exchange to flat, be the futures, And in data, that dynamics

issue. that I when wildcard, so is say it's And there a

down. time, something roll expect to said it's won't it way As I right it not But to into think I last going detract, It that's contribute. I really be contribute to year, don't won't it Jeff but growth. next the

Jeffrey Sprecher

that I don't an mean NYSE act, of of the of suggest The the press, covered the actions mean Yes, around and at the there's raise press fairly -- the don't a tend tends unfair. NYSE understand think interesting articles the to exchanges peers, lot it's pricing don't its think the be I prices. just that press to by they won't nuance to SEC is and the dynamic taken has able competitors. I I exchange

bundles is things prices, what's the actually even any failed frozen. other offer or the and exchanges lower I think understood be can't actions, exchanges can't or do really new to products are that

we interest have we an So in it lowering actually will stimulate more think because demand. prices some

is bundles an Our price been And expansion. driven NYSE straight new looking of demand products ways and things, not heavily growth of really new data around the increases. and by services and at new it's new and

exchange products, we that think at causes have connectivity so. it decade have it's the that been XX And business or over built I over the data to the grow. last data that products and

been think just as the the about in filing, litigate. models, I through as next SIFMA Every So SEC it's venues it's to years mean, at back single subject where of year, budgeting are bank now, that is the exchanges both market have litigation. SEC. now And looking within litigating and building we're the that. And about frozen. for just you outside of wanting for The think likely -- we your a this that's

there together not products, innovation out which lot doesn't may unless come of conversation space. to a be data allow those may on to resolution the quick going certainly around a around and figure seem to So industry wants how There's happen. the or

Operator

The Sachs. Alex question from Goldman of comes Blostein next

Alexander Blostein

I want to second, in kind services of approach the wanted to zone the segment, and to really go Scott, back a analytics. for holistic and more appreciate to data on but pricing

bit. looks down this are I as has little like kind engine the historically, the within growth the a slowing dynamics of segment, and think, been it viewed fastest

it's look year-over-year. X% at you up If ASV,

time going year, to this last up it think I was X%. be

from a do what under taking expect back are products hood and you a bit, to perhaps here? that step to guess, I the that's seeing ahead, more growth the looking looking slowing what And you So contribute little down growth?

Scott Hill

question. good a it's Yes, Thanks.

first the year, help grown to ago, table we've just pricing closer X.X% the our And has I last thing X%. put because average on think myself, years business time year, on data do I analytics on two So some period. average, can't to that and I'd numbers over this grown same

grow So to X% it has business used X%. that the led IDC the don't that growth. And forget, is to

And so mentioned I we're the earlier it dynamics repeat because won't of as I and all here. growing fast, that it's twice

the going to to As to in an we lead would is closer to I think X% we range mentioned, data a -- next that we basis chart. said, grow overall I I say, on model next think into organic pricing year, is model business analytics X%, revenue I roll X% can year. X%. and X% again, of

the was I that we four the have a tool where dynamic a in simply seeing that bond that of one have, ago, the reflects lots in some we've think again, you're which sales activity in kit, of team where, we from world had ASV gone to the prices tools sales years kit.

if so your data And on us, our data take from a us if historic let you'll become off our you'll be buy vault. may if buy provider, we bond through you'll trade willing feed short-term to more data prices reference

high too next a year up flush I'm X% in line a the lines X%, as more is not of and or should is X% you through which the in next again, in And it earlier the bit is, bottom too quarter the long in road, the get Ken on to for two I or to I overall, this ASV which kind the importantly, ASV. good tends where It that similar last it. quarter, a whether overall question that's slide. hung I so But it in sustains why us see And think it is I particular the specific it's ASP don't answered quarter little Richard's I X% pricing X% the us focused question, of as ability and opportunity so appendix to a that did, you because quarter, more asked over resell, business gives levels. can retention on way range, as down said or think gives

healthy and pricing in the directly see So we're actually and we in I think lines importantly, bottom line. in yield it dynamic analytics the is the seeing while other line, may not a the one because that on

Jeffrey Sprecher

remarks point like reiterate. And to comment that to to I'd business customers. I it's prepared that headcount made this tried one other not my we've so design a in in correlated our

you a the doing, talked about lot we've of what we've bundling. to you got notion this If and that about think amazing we're all we portfolio, this fact like

consolidate. And an think early bundling looking venues, enterprise headcount-oriented is execution asset services We've consolidation in matters, do but and consolidate, not landscape are it's seen mean so capital high-frequency broad the we of scale -- consolidator were across we've the over we and as consolidation managers for seen exchanges we space. financial time why as alpha. global traders are a consolidate, brokers I see I because that solutions

to redesigned way us. to it have the be seems and market, for we we go so And working

Operator

from question of The next Owen Oppenheimer. comes Lau

Owen Lau

Bakkt. Questions related to

bitcoin two competitors most your launch launch your them your options. that did this also, bitcoin What key from currency of you after What kind years launched into take the would of get and facilitate in XXXX, the customers seems space. bitcoin of bitcoin payment of futures be digital Bakkt will bitcoin over months futures the digital launch also space? are futures, enter to asset become two of that futures? in consumer potential just of it One And to characteristics a likely it after the would launch feedback your December a probably

Jeffrey Sprecher

questions. Those are good

the You've what obviously looking there between and we're along been margins. doing following

designed no but unregulated adopters with regulatory is on very So exchanges retail really capital -- regulated transparency to that early have been digital lack services reason oversight, that call being whatever assets themselves as a consumer customers Global platforms and something to comfortable not really handled. particular being attract traditional for it's footprint and coming how financial is have is up players. for

this a looking are And to us these digital opportunity lend bring so there's all with an -- to that and and what will, into The our in expertise of this more trust, assets. thing at if footprint and we all, building talking we're first out think so the global about this you it. regulatory figure the institutions seeing financial market of to whole of amount Bakkt our institutions kind and regulation to that transparent are coming kinds out on hedge But funds, tremendous what crypto you're so of crypto forth, where investors quickly going institutional are institutions regulators trying that of there's and of and makers. around space are that the fits is a kinds and dialogue are so think to into new so what

And brokers still And know major Many working of into move banks own offshoot own into fits regulators. by to are to with ecosystem. major the and these it's when figure started are got business with their they be who but the to have with assets. space, players us, we approved got they do out are this an their us, be trying how of their to working regulated know digital this that deal it's

the dependent that unregulated and cash it settlement We own so out not we're price where OTC. these contract on is futures you, it is brokers As an for that physically market we underlying It out markets. market, there that itself a we have develop done quickly, happens market is in our price, interest bitcoin We're in the source having dealing and perfect cash options. there's active delivered. prices people is one cases our a we've been transparent. but most there's venue and with discovery options than a the of lot said that very options so to nicely lends they are transparent the backdrop, less of in options of have Bakkt hedging that very launched that what because strong know with that come just bitcoin way an even and can have OTC trade people hedge It's that

So get that quickly. was the to options out pressure the

for digital I the think side, payments space speculators, a our value. it's you digital future and that value we to there could And many and but exist. has pointed efficacy, case don't on the that speculative potentially developed, future the a transfer bitcoin, the asset the real we use space going On use be we payment that been whole think that a value, capabilities relevant most And space are tokens of the its of where really speculating be as the of cases is that out, of a is digital with And of largely been do, the we digital of that, be use future will cases. grow used that store focus is also, which one because is way through has payments. mining think token have unless

They value that argue it was Now store because younger We the that's currency. store value. was to payment hoarded as from many old that and time, because And Bakkt, I'm ability coins, old, circulation. nature engineers gold hired much became spend a I, one I point, at at bitcoin there, it's got argue, I companies over of the I'm it we've its and workforce the it digital gold time, world. work a in and very younger But gold. to of around the of people a had because view guy, a over that became think I a of an

as by all payment. interbank we overnight year Intercontinental very And today, of actual And contract that used currency. Exchange crisis, XXXX was to opposed first we the that in gold between accept to receipts product gold a in at in fact, was sending gold a settle an trading as form differences launched

than a the the users fiat cost converting will foreign that the use So you'll it think and and payments bitcoin back merchants to fiat. of accept and if I of and as then currency rather store currency well bitcoin and convert avoid that do you will forth of bitcoin goods have element FX an may to as be directly, because and services buy well value fiat will, exchange,

of that people And I here. into we unique to test old see that rollout so infrastructure, and in the have move exotic the XX dedicated thesis you'll one us quite we XXXX, out platform, -- and digital we'll think and guy's building probably an are building out thing as we it's

Operator

turn would the over This I conference back Jeff remarks. concludes like to our to Sprecher any question-and-answer for closing session.

Jeffrey Sprecher

about and you, forward Well, the you Have one. the good thank appreciate We'll everybody the to results I call. look you next day. our thanks on for moderating a panel, updating Andrew. on year-end

Operator

has now presentation. Thank today's for you attending concluded. conference The

You disconnect. may now

Intercontinental Exchange (ICE) 31 Oct 192019 Q3 Earnings call transcript